What is a Center of Excellence

Continuing a series of posts addressing some of the lessons and take aways from recent experience in establishing Centers of Excellence.

I’ve never really liked the term. Sounds so haughty. I prefer ‘Competency or Capability Center’ or pick any another term you like. But, ‘Center of Excellence’ seems to be what has stuck in the business world, so we’ll go with it here.

Definition: Whatever you call them, a Center of Excellence (CoE) should, at a most basic level consist of: A team of people that promote collaboration and using best practices around a specific focus area to drive business or customer-valued results. This team could be staffed with full- or part-time members.

Responsibilities: In my experience, CoEs should serve five basic needs:

Support: For their area of focus, CoE’s should offer support to the business lines. This may be through services needed, or providing subject matter experts.

Shared Learning: Training and certifications, skill assessments, team building and formalized roles are all ways to encourage shared learning.

Measurements: CoEs should be able to demonstrate they are delivering the valued results that justified their creation through the use of output metrics.

Governance: Allocating limited resources (money, people, etc.) across all their possible use is an important function of CoEs. They should ensure organizations invest in the most valuable projects and create economies of scale for their service offering. In addition, coordination across other corporate interests is needed to enable the CoE to deliver value.

Types: One organization I worked with defined 13 centers within just their IT department. While all of these are important competencies they need to develop within that department, I’m not sure all reach the threshold of a CoE. Some common examples of CoE’s I’ve seen are:

Six Sigma – Perhaps six sigma is the most mature of the CoEs that some organizations have embraced. This type CoE was invented by Motorola and popularized by GE. Many companies have grown this into a strategic asset they use to differentiate themselves and drive competitiveness. It has formal roles (Champions, Sponsors, Black Belts), a well understood methodology (DMAIC), standard set of tools (Statistical control, etc.), a formal certification process (Green Belt, Black Belt, Master Black Belt) and an active community.

Process – To me, this is the most strategic of all CoEs since all businesses are made up of processes. I’ve started to see a few companies establish this as a CoE. One I know of is currently creating a role for a ‘Global Business Improvement Executive.’ I love that. It allows for all the traditional focus of lean and six sigma as well as for creating new strategies and business capabilities. I’ll have more comments on this as a CoE in a later post (see Process Center of Excellence.)

Project Management Office (PMO) – Many fail to think of themselves as a CoE and act as little more than a governance body, but the most successful PMOs grow beyond that single focus and take on a full CoE role around project management.

Quality Assurance – Whether for new product or software development the complexity of the roles, tools and techniques needed for quality often get formalized into a CoE. This may be tied to a six sigma CoE or stand alone.

Business Analysis – Some organizations have embraced the idea that getting business requirements, especially around software development, is a problem best addressed by a CoE. A certification for Business Analysts from the IIBA has further advanced this idea.

Communications – Corporate communications, employee and customer relations are activities that are often supported by a centralized support process or function. At a basic level, their role is to support the line business around this focus area.

Risk and Compliance – Many organizations have created this capability without formally calling it a CoE. Insurance and financial institutions without exception will have this function. Other verticals may also embrace it. They almost always have veto power on changes to business processes or external communications. In ideal cases, they will help deploy standards and facilitate understanding throughout the organization.

Human Resources – Another “function” or support process many businesses have embraced at a strategic level that meets the definition of a CoE.

Hopefully, some of these bullet points get you thinking more broadly about what a CoE is. If I extrapolate this thought stream past its current use, CoEs can really refer to any of the support processes within an organization that complement the line businesses. Not all organizations will embrace all the CoE’s listed above, but most will have some support processes. Is product development a CoE? How about sales and marketing or finance? While I don’t think businesses are ready to broadly embrace this concept, I do think that having leaders of all support processes think like a CoE can improve their focus and the value they deliver.

I think the term is being overused to the point of losing its impact. It seems very popular in government, including military, circles. I guess I just think it’s not a very good term, implying that excellence doesn’t exist much elsewhere.

Thank you so much for your nice article, at least since it is from 2008,
it is showing the improtance of that specific topic! At the last SES in
San Francisco where I went to, was one special workshop about it!

To many CoEs fail to support the very meaning of “center for excellence”. Dave is right in pointing out that having one particular CoE implies that the “inter connected” departments of the institute are not doing any excellent work.
In my opinion the better word should be without the adjective “excellence”.

To me, a center of excellence’s main role is to provide service to the lines of business. In this role, they are most valuable located with them. Depending on size and focus, a core group may want to be co-located to coordinate effort and share learning and techniques. The majority of the resources would be working in project and mentoring roles alongside the business and transitioning among them as priorities and projects shift. A valuable analogy may be a consulting business – they typically have a central office, but the real work is done at client sites.

Even the post is old I am happy I found it and I find the information very interesting and acurate to the situation of my company – trying to establish a-real-working CoE.
Please, keep me posted for further info on this matter.

Very useful article. Please keep the knowledge info coming. My background is AR Management (PRINCE2) and I’m at the beginning of trying to establish a CoE for my company. They view an AR CoE as a very important service function to the wider business.

I totally agree with the devaluation of the word ‘excellence’, but the ‘team’ word is fundamentally understood I believe. One is not register a company with the word ‘British’ in the name, without being required to prove that the company is pre-eminent – perhaps words like excellence should be treated in the same way?
Good article. I’m off now to incorporate a CoE website that supports businesses by guiding them towards determining if their knowledge warrants their use of the word excellence, and provides the training to bring them up to standard if they test not yet competent. Governance provides me with an excellent vehicle for steering members towards my training packages… yabadabadoo!

Excellent write up. I am looking at drafting the very different job environment of my Physiotherapy Centre under a registered brand name BainsPhysio. Your atricle would give me guideline to spell out in order the various area that we excel. Keep posting on CoE materials on my email bainsphysio@gmail.com. If any body out there could give me an input on this I shall appreciate. Rgds Dr.Bains

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Thanks for the post. I discovered it during my research in support of a proposal to develop “High Schools as Centers of Environmental Excellence” . This is to be implemented in a South American Town where there are both critical educational and environmental challenges.

Just another re-invention of the mouse trap. Micro-management already exists to the point that an employee cannot do a simple correction without a work order that has to go through a chain of command. Hourly employees are working people trying to feed themselves and their families and should not have to set on their butts filling out request forms for equipment they should already have. Commities we need to a point, but not past the point in which they add onto the cost of the product which already is highly inflated. An example of this can be seen at the grocery store when the consummer buys a lb. of hambugger that gives them a choice of 75%, 80%, 85% or 90% lean beef. Cut the fat in management and make them do their jobs instead of making them feel their a means to an end. This remedy, however as good as it is will still not cause a drop in the cost of consummer goods for as long as inflation exists. Bubble Economics Team would be a better name.

In simple words TCoE is a centralized testing model that brings people and infrastructure together into a shared services function for standardizing test processes, optimizing utilization of resources and creating re-usable test assets / repositories.

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